Getting into the Vending Machine Business
Vending machines have been around for a long time – and they are still popular. More people are traveling and have busier schedules where they just don’t have time to sit down and eat a meal.
Vending machines don’t necessarily have to carry food items either. The best items for your vending machine will of course depend on your market – which comes down to where you place your machines. For example, a laundromat location is likely to carry different items than a sports complex.
The vending machine business is a time-tested profitable opportunity where a budget entrepreneur can get started for minimal investment and work from home on a convenient schedule. The tips below will help you get started, save money and avoid costly and time-consuming mistakes.
Vending Machine Business License
One of the first questions you need to answer when going into business for yourself is “What business licenses and permits do I need?”
Licensing requirements vary by city and state, and the easiest way to get the information you need is to contact your local city office directly. You can do this by phone, walking into your city hall or now you can sometimes get requirements and license applications right from your city’s and state’s websites.
Another useful resource is the Small Business Administration website. They list contact information and some licensing instructions on all cities, counties and states in the USA.
Where to Locate Your Vending Machine for Maximum Profit
Probably the biggest factor in the profitability of a vending machine is its location. You can hire a locating service to do the work for you, but you can save yourself some money by doing the work yourself. You want to spend quality time researching and comparing possible locations, as you will find there is lots of competition.
Ideally, you want a high-traffic location that does not already have lots of other vending machines. Also look for a safe and clean environment so that you keep maintenance costs to your vending machine to a minimum. There may also be certain requirements or restrictions in certain areas that affect profitability.
Here are some ideas of good vending machine locations:
- Airports and other transportation facilities
- Shopping malls, movie theaters and other entertainment centers
- High schools and college campuses
- Sports complexes, skating rinks, bowling alleys, parks, etc..
- Restaurants, bars, cafes and other eateries
- Large or open-air markets
- Office buildings, banks
- Auto repair or oil change centers
- Apartment complexes
Benefits to Getting Refurbished Machines
If you are buying vending machines for your business, why not look at refurbished models while you look at new machines? The refurbished versions can sometimes include warranties plus fast and easy delivery that you’d get buying brand new. Snack, soda and even frozen food vending machines are available refurbished.
When you shop for refurbished models of vending machines, check out the (1) warranty coverage, (2) what type of inspection is done on the machines prior to sale and (3) the repair service available. Expect a warranty to last about one to two years. You can also opt for an extended warranty, which will add more years on to the standard protection package.
The lifetime of a particular refurbished vending machine is not guaranteed. However, you can get customer references from the vending company and talk with other vending machine owners to find out what their experience has been.
Why Buy a Used Vending Machine?
Many times, you’ll see used equipment offered in the classified ad section of newspapers or published online. You would expect used equipment to cost less, but you also need to be prepared to pick up the machinery as well. Factor this into your purchase cost.
Used equipment does not generally carry a warranty. Therefore, you should be knowledgeable in repairing and maintaining a vending machine or know someone who care for the machine when needed. This will take a large amount of the risk and hassle out of buying equipment that is not new and may need additional maintenance.
If you find used equipment nearby and have a vehicle in which to transport it, this situation can work in your favor. If the machine owner is anxious to sell, and there are limited buyers in the area, you may be able to negotiate a low price.
Do your research and comparison shop to locate the best bargains. Ask for tips from individuals who have already operated their own machine businesses. Their experience can help you save money and increase your profits.
Financing Your Vending Machine Business
Many vending machine companies offer financing for their equipment. They may be able to offer you the best terms, especially if they know you are shopping with other competitors, and they want your business.
However, if the company does not offer financing or the terms are not what you like, a credit card can be another viable option. The key factor is to use a card with excellent terms and a lengthy low introductory rate.
At first, you may think it will be expensive to finance a business using credit cards, but it doesn’t have to be. In fact, several business people have successfully started their small and home-based businesses with the help from these financing alternatives. You can apply for a new card or use one you already own. However, keep in mind that once you start using it, you should use it exclusively for business purposes.
If you decide to open a new account, keep in mind that the card does not need to be advertised as a “business” credit card. You can get a regular or a business account. Sometimes it can be easier for home businesses or start-ups to open an account under a personal name rather than a business name because they have an established credit history.
Use a web-based credit card comparison tool that let you see rates, fees and benefits of multiple cards at one time. This can save you lots of hours and dollars. Credit companies that offer zero percent introductory rates can save business owners hundreds of dollars, especially if they are able to pay back the borrowed funds by the end of the introductory period. On top of that, cash back, travel or rebate reward programs can also put money back in the business owner’s pocket.